The Radar: Tracking Military Family Financial Fitness

We’ve surfaced salient points from a range of sources to understand how military families are really faring on the financial front. Keep reading the summary or jump to our library of Research.

The Radar: Tracking Military Family Financial Fitness

A Note from David Evetts

At The USAA Educational Foundation, we regularly analyze the latest findings about military family financial habits to inform the ways we support their financial literacy and success.

Now, for the first time, we’re sharing our analysis and insights. I’m proud to introduce The Radar: Tracking Military Family Financial Fitness.

This summary elevates key findings about the state of military financial fitness and distills them into tangible takeaways. By sharing it, we hope to support more informed decisions among the many stakeholders invested in helping our service members and their families thrive.

All the best!

David Signature

David Evetts
Assistant Vice President
The USAA Educational Foundation

Analysis From the USAA Educational Foundation Experts

57% of military families surveyed had experienced a financial emergency – 2021 Military Family Support Programming SurveyThe Government Accounting Officer (GAO) reported several points of financial concern for military families including compensation and benefits, spending patterns, personal financial management skills, frequent or unpredictable deployment cycles, and access to digital or postal communications while deployed. All of these concerns can potentially lead to delays in meeting financial commitments.

Frequent change-of-station moves can also make it more difficult for a member’s spouse to maintain consistent employment and earnings. A family accustomed to budgeting with two income streams might struggle with debt payments following a move to a duty station where the military spouse is unable to find employment or where remuneration levels are significantly lower for similar work.
Military Readiness: Department of Defense Domain Readiness Varied from Fiscal Year 2017 through Fiscal Year 2019

The Congressional Research Service (CRS) reported on military personnel and family concerns in January 2022. One study found that spending patterns and management skills contributed to financial challenges more significantly than pay. Core aspects of military life including unpredictable deployments, frequent moves, spouse employment challenges, housing costs, financial literacy, predatory lending, and the age of Service members (40% are 25 years old or younger) add complexity to the financial outlook for Service members and their families.
2022 Military Families and Financial Readiness Report
Assessing the Personal Financial Problems of Junior Enlisted Personnel

A 2021 Military Family Advisory Network (MFAN) survey reported barriers to saving including insufficient pay, inflation, housing costs, debt, living expenses, and a lack of understanding and implementing personal financial planning. Of the families surveyed, 51.2% had trouble saving money over the past two years and 57% had experienced a financial emergency at some time. Other points of concern included the availability of healthcare and child care, and resources to support separation.
2021 Military Family Support Programming Survey

Blue Star Families’ Military Family Lifestyle Survey 2022 Comprehensive Report found that spousal employment, separation and time away, relocation, pay, Basic Allowance for Housing and off-base housing were additional concerns for military families.
Military Family Lifestyle Survey 2022 Comprehensive Report

16.6% of military and veteran families are food insecure. (2021 Military Family Support Programming Survey)Results of the 2021 Active Duty Spouse Survey showed that 25% of spouses experienced food insecurity.
2021 Active Duty Spouse Survey

A Rand Corporation study from 2023 showed that the U.S. Department of Agriculture classified approximately 15.4% of active duty personnel and families as having low food security in 2018. It classified another 10.4% as having very low food security, with food insecurity highest among those living on post. Of those classified as food insecure in 2018, 14% reported using food assistance in the past year.
Food Insecurity Among Members of the Armed Forces and Their Dependents

The Department of Agriculture estimated that 10.5% of the general U.S. population experienced food insecurity in 2021.
Food Security and Nutrition Assistance

MFAN has studied food insecurity in the military population since 2017. Initially, MFAN found that 15% of military and veteran families were food insecure; however, in 2021, data showed that number increased to 16.6%. Even more alarming is that MFAN reported that 23.3% of enlisted families showed a degree of food insecurity, and the minority families within that group appeared to have disproportionately higher food insecurity.
2021 Military Family Support Programming Survey

Blue Star Families’ Military Family Lifestyle Survey 2022 reported that 35% of junior enlisted (E1-E4) and 11% of E5-E7 used government food assistance programs and that 9% of active duty Service members have used a local food pantry or community resource compared to 50% of eligible civilian families.
Military Family Lifestyle Survey 2022 Comprehensive Report
National and State-Level Estimates of WIC Eligibility and Program Reach in 2020

Service members who served at least five years had the healthiest credit records by age 24 – Financially Fit? Comparing the credit records of young servicemembers and civiliansAccording to the 2020 DOD Status of Forces Survey, the financial well-being scores of Service members outpace their civilian peers. 24% of active duty and 21% of reserve component had scores of 50 or below, compared to the 38% of adults with a score of 50 or below in the Federal Reserve’s 2020 Survey of Household Economics and Decision Making (SHED). In general, the financial well-being of military Service members is better than their civilian counterparts across several measurements.
2020 DOD Status of Forces Survey

The 2018 National Association of Realtors® Veterans & Active Military Home Buyers Profile compared active duty and veteran home buyers and sellers with those who have never served. The findings showed that 56% of active duty and 41% of veterans are 100% financed compared to 7% non-military.
Home of the Brave

The Consumer Financial Protection Bureau (CFPB) compared younger Service members and civilians in 2020. The CFPB found that Service members are:

  • more likely to have an auto loan or a credit card
  • slightly more likely to have a mortgage
  • and less likely to have a student loan or a third-party collections account.

Also, Service members who served at least five years had the healthiest credit records by age 24. Those who served less than five years experienced a drop in credit score of about 20 points after separation. Those who joined the military before age 20 and left in less than five years had a deep subprime score at age 24. In many cases, credit scores dropped due to delinquencies and defaults following military service.
Financially Fit? Comparing the Credit Records of Young Servicemembers and Civilians

The majority of active-duty families (72%) described their financial situation as “doing okay” or “living comfortably,” according to Blue Star Families’ Military Family Lifestyle Survey 2022.
Military Family Lifestyle Survey 2022 Comprehensive Report

60% of active duty and reserve component military families have less than three months’ worth of emergency savings – 2020 DOD Status of Forces SurveyThe 2020 DOD Status of Forces Survey reported that 60% of active duty and reserve component military families have less than three months’ worth of emergency savings. Junior enlisted personnel were more likely to have no emergency savings despite stating the importance of saving for an emergency. In 2019, 17% of active duty and reserve Service members indicated they had no emergency savings.
2020 DOD Status of Forces Survey

Sixty-nine percent of food-insecure military families reported they had an emergency savings account and most reported having only enough money to cover expenses for three months or less. About 30% of food-insecure families had less than a month’s expenses to cover a financial emergency, and fewer than 10% of food-insecure families had enough savings to cover three to six months of expenses. Specifically, regarding Permanent Change of Station (PCS) moves impact Service members leaving them unable to deal with an emergency.
Food Insecurity Among Members of the Armed Forces and Their Dependents

Spouses manage finances in most military families. Spouses experience more stability and awareness of the day-to-day expenses compared to Service members, who are subject to frequent deployments and temporary assignments.
Spouses Play a Critical Role in Military Family Finance

The U.S. Securities and Exchange Commission wrote that spouses are responsible for the family’s financial readiness and serve as the “family’s chief financial officer.”
Military Spouses: Ensuring Financial Readiness on the Homefront

In 2021, the Military Family Advisory Network reported that the responsibilities for financial management decisions (47.8%), budgeting (56.5%), and day-to-day finances (63.1%) often fall to the spouse as opposed to the active duty Service member.
2021 Military Family Support Programming Survey

51% of military families said they did not understand the Blended Retirement System – 2017 Military Family Lifestyle SurveyBlue Star Families and the Institute for Veterans and Military Families reported that 37% of military families were moderately or very insecure about their financial future, and 51% said they did not understand the Blended Retirement System.
2017 Military Family Lifestyle Survey

MFAN reported that job security and corresponding financial stability, along with retirement benefits, were high points of military service; however, 51.2% of respondents reported numerous barriers to saving and a limited understanding of financial planning.
2021 Military Family Support Programming Survey

In November 2022, the Federal Retirement Thrift Investment Board (FRTIB), the entity that manages the Thrift Saving Plan, reported that 1.2 million BRS participants had an average balance of $10,000; and that 1.3 million Legacy Retirement Plan participants averaged $37,400 per account. 81.5% of active duty BRS participants receive the full 5% contribution match, as do 75.1% of reservists.
Thrift Savings Fund Statistics

In comparison, the U.S. Census Bureau reported the median value of 401(k)-style accounts was $30,000 in 2020 and of working-age people in the U.S., 18.2% owned an Individual Retirement Arrangement (IRA) account, 34.6% owned a defined contribution (DC) account (401(k)/TSP), and 13.5% had a defined benefit (DB) plan (pension). Results also showed that 81.1% of people actively made contributions to their IRAs, 92.1% to their DC account, and 57.7% to their DB plan.
New Data Reveal Inequality in Retirement Account Ownership

In 2022, The U.S. Bureau of Labor Statistics (BLS) reported that 62% of civilian employees had access to a DC plan and 25% had access to a DB plan. Only 50% have participated in medical care programs. In contrast, all Service members have access to a DC plan (TSP) and DB (pension) if they serve long enough.
Employee Benefits Survey Latest Numbers

The DOD’s Transition Assistance Program (TAP) is a mandatory course to help Service members transition from active duty, yet 82% of survey participants did not attend the course. Only 23% of spouses were aware of the Spouse Education and Career Opportunities’ Military Spouse Transition Program (MySTeP ).
2021 Military Family Support Programming Survey

After separating or retirement, Service members are often underemployed. Veterans entering the civilian workforce do not always secure positions that truly reflect their skills and experiences, thus leading to underemployment.

Measuring Our Communities: The State of Military and Veteran Families in the United States

5+ million caregivers caring for veterans Caregivers and – Family SupportAlmost 5.5 million caregivers are caring for veterans, 96% of those caregivers are women, and more than 80% of Post-9/11 caregivers are caring for someone under the age of 60. 70% are caring for a spouse or partner and provide care for an average of 10 years. More than half of caregiver support programs were established in the past ten years, and 80% are nonprofit.
Caregivers and Family Support
Military Caregivers – Who Are They? And Who Is Supporting Them?

More than 100 programs offer services to military caregivers, yet few programs are designed specifically for the caregiver population, and other programs are geared toward caregivers for older populations rather than Post-9/11 caregivers.

Caregiving can pose a financial burden to caregivers, employers, and society as a whole. The Rand Corporation reported that caregiving for Post-9/11 veterans and Service members costs the U.S. economy about $5.9 billion annually in caregivers’ lost productivity. 47% of caregivers report needing to adjust their work schedules, and 62% reported that caregiving caused them financial strain. Distressingly, 33% of military caregivers lack health care coverage.

Of the veterans requiring care, 25% rely on their parents who are aging and who eventually will no longer be able to provide support. 33% rely on spouses who are young, leading to as many as one-third of these marriages ending in divorce. These factors put military caregivers at an increased risk for depression.
Military Caregivers – Who Are They? And Who Is Supporting Them?

21% unemployment rate for military spouses – 2021 Active Duty Spouse Survey According to the 2021 Office of People Analytics Active Duty Spouse Survey, 64% of spouses were in the civilian workforce, and their unemployment rate is 21%.

The primary reason that many spouses are not employed outside the home is because they’re working in the home providing child care. Frequent PCS moves, living on base, and geographic separation due to temporary duty are also key contributors to spouse unemployment and underemployment: when the spouse accepts a job below their level of experience, skills, and training. The average time that unemployed spouses looked for work was 19 weeks.
2021 Active Duty Spouse Survey

Frequent PCS moves make it more difficult for a spouse to maintain consistent employment and earnings. A family accustomed to budgeting with two income streams might struggle financially following a move when the military spouse is unable to find employment or where pay levels are significantly lower for similar work.
Military Readiness: Department of Defense Domain Readiness Varied from Fiscal Year 2017 through Fiscal Year 2019
2022 Military Families and Financial Readiness Report

Military Spouse employment is a challenge. Purdue University’s Military Family Research Institute reported that more than 47% of spouses require at least four months to find a job; coupled with frequent moves, this time adds up. The lack of employment and subsequent loss of income impacts financial wellbeing in the near term; however, over the long term, it can affect the family’s ability to retire. For instance, 58% of spouses reported they fail to meet the vesting requirements of employer-sponsored plans, reducing their retirement nest egg.

Measuring Our Communities: The State of Military and Veteran Families in the United States

44% of those surveyed, say financial pressure has been detrimental to their emotional and mental health – Military Family Support Survey 2017 ResultsMoney management problems, which are often tied to a lack of financial education or discipline, lead to a significantly higher likelihood of homelessness (17x more likely for those making above $50k and 3.5x more likely for those making below $50k). Veterans with financial issues or problematic financial status reported greater difficulty adjusting to civilian life and negative impacts on their overall well-being.
Financial Status and Well-being in Recently Separated Military Veterans
Why Financial Literacy Matters After Returning Home from War: Reducing Veteran Homelessness by Improving Money Management

Of active service members and veterans surveyed, 44% say financial pressure has been detrimental to their emotional and mental health.
Military Family Support Survey 2017 Results

Financial problems increase the odds of suicidal ideation and suicide attempts in Veterans. Of the seven types of social stress factors: violence, housing instability, financial-employment problems, legal problems, family problems, lack of access to care-transportation, and psychosocial needs, researchers found that 16.4% of patients had a least one social stress indicator and that each additional stressor increased odds of suicidal ideation by 67%. Four of the top 20 suicide risk factors are finance-related, and 23% of veterans reported having financial problems before a suicide attempt.
Recent Stressful Experiences and Suicide Risk: Implications for Suicide Prevention and Intervention in U.S. Army Soldiers
Social Determinants and Military Veterans’ Suicide Ideation and Attempt: A Cross-sectional Analysis of Electronic Health Record Data

Service members are three times more likely than civilians to take out payday loans.
Why Financial Literacy Matters After Returning Home from War: Reducing Veteran Homelessness by Improving Money Management

Predatory lenders target military populations, seeking out young and financially inexperienced Service members with savings accounts and steady income.
Report on Predatory Lending Practices Directed at Members of the Armed Forces and Their Dependents

In 2020, the CFPB received over 40,800 complaints from Service members, an increase of 14% from the previous year. Most of these complaints were related to credit or consumer reporting, debt collection, and mortgages. Service members submit complaints about debt collection practices at a higher rate than civilians.
2022 Military Families and Financial Readiness Report


Research

Learn more about military family demographics and financial well-being from industry reports.

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